Watch Out for “Assembly Line” Retirement Planning
Some things work best when assembled exactly the same way every time. Your car, for example, comes to mind.
With a standard process in place at the manufacturing plant, mistakes get minimized, your car gets assembled faster, and that’s part of what makes the car affordable for you.
Why Retirement Plans Should Always be Customized to Your Needs
But with other things, especially services, you don’t want a standard assembly plan. That’s because not every person is the same. What makes you most comfortable may terrify the next person, and vice versa.
For example, you might be comfortable with a high allocation of stocks in your retirement portfolio. For long-term growth, that means you’re in a good position. However, you will have times where your portfolio loses a significant portion of its value.
Some people can’t sleep at night with those huge swings in value. They wonder if they’ll ever actually have the money they need to retire.
So for them, they might need a higher allocation of bonds, and a lower allocation of stocks. They’ll still have swings in value. And they will lose a fair amount of value at times. But, the losses won’t be nearly as dramatic. And that helps them sleep easier at night.
Other investors like to see low expense ratios. That’s approximately how much money it costs to run a mutual fund or ETF. The lower the expense, the less money spent on overhead. And that means more money in your pocket over the long run.
What Plan’s Best for You?
That’s why you work with a financial adviser. You want one who gets to know your personality and preferences and designs a plan to match.
That could mean you want a plan with more conservative approach that aims for minimal growth. There’s absolutely nothing wrong with that. It just means that you won’t see the greatest growth possible. You don’t have to aim for the most growth if you don’t want to.
On top of that, you may have unique needs other investors don’t. You mayst need to form an estate.
It all depends on your unique circumstances. And you might need help identifying what’s most important to you.
That’s why custom plans always make sense. Remember, if you feel like you’re being treated like a number, you probably are.